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In the red with Imperial Brands!

Practical discussions about equity High-Yield Portfolios (HYP) for income
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pendas
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Re: In the red with Imperial Brands!

#124471

Postby pendas » March 13th, 2018, 9:39 am

I'm 30% down on capital with Imperial.

22 of a 35 share HY portfolio are in the red at the moment with a total loss of around 10%, equivalent to 2 years income.

I'll be selling £40k of shares in an unsheltered account to fund next years his and hers ISAs in a week or two and for the first time since I started transferring a few years ago there will be little or no capital gains to be realised on the sales. 14 of the 19 individual shares still held in this account are in the red with the only substantial capital gain in the account not a HYP share but an IT, MYI, up 37% since purchase in 2015.

Hardly seems fair now paying tax on income that effectively comes from capital depletion. :(

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Re: In the red with Imperial Brands!

#124473

Postby Arborbridge » March 13th, 2018, 9:42 am

tjh290633 wrote:
If I have to trim three times in a year, that is above average. Very occasionally that could be the same share, but not often. It is an indication of the level of volatility in the market.

TJH


My batting average is nearer to three times a decade!

I dare say Ian would trim my IGG holding at 1.4x median ;) - it has rocketed up in the past few months and might deserve a trim being, let's say, a lesser known HYP share and not one of the stalwarts.

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Re: In the red with Imperial Brands!

#124495

Postby idpickering » March 13th, 2018, 10:47 am

Arborbridge wrote:
tjh290633 wrote:
If I have to trim three times in a year, that is above average. Very occasionally that could be the same share, but not often. It is an indication of the level of volatility in the market.

TJH


My batting average is nearer to three times a decade!

I dare say Ian would trim my IGG holding at 1.4x median ;) - it has rocketed up in the past few months and might deserve a trim being, let's say, a lesser known HYP share and not one of the stalwarts.


I probably would trim them back Arb. In fact IG Group were another that I couldn't bring myself to add to my HYP. They fall into my 'you don't have to hold everything' pile. As you say, not one of the stalwarts.

Ian.

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Re: In the red with Imperial Brands!

#124501

Postby idpickering » March 13th, 2018, 11:03 am

pendas wrote:I'm 30% down on capital with Imperial.

22 of a 35 share HY portfolio are in the red at the moment with a total loss of around 10%, equivalent to 2 years income.

I'll be selling £40k of shares in an unsheltered account to fund next years his and hers ISAs in a week or two and for the first time since I started transferring a few years ago there will be little or no capital gains to be realised on the sales. 14 of the 19 individual shares still held in this account are in the red with the only substantial capital gain in the account not a HYP share but an IT, MYI, up 37% since purchase in 2015.

Hardly seems fair now paying tax on income that effectively comes from capital depletion. :(


I feel your pain pendas, and thank you for being so open about this. In my HYP 11 of my 29 holdings are in the red in capital value terms. Some have disappointed a lot, such as Pennon Group. Am I stressed about this fact that such a lot of my holdings are in the red? Not really, because I realise/remember that my HYP is an income machine. Keep the faith. Hard though it may be sometimes.

Ian.

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Re: In the red with Imperial Brands!

#124507

Postby tjh290633 » March 13th, 2018, 11:21 am

I'm just checking up on the amount of trimming that has been doen since April 2008, when PEP and ISA merged.

2008-9 - This was an unusual year! 17 trimmings and 4 complete disposals (Cadbury, HBOS, Mapeley and Thus).

2009-10 - More like it, 5 trimmings and 5 complete disposals (DSGI, Trinity Mirror, Anglo-American, Rentokil and Premier Foods)

2010-11 - Only 4 trimmings and 7 complete disposals (Prudential, Yule Catto, ITV, Tomkins, Brit Insurance, Northern Foods and Cattles).

2011-12 - Only 3 trimmings (TATE, Shell B and DS Smith), no disposals.

2012-13 - Only 1 trimming (WMH) and WMH rights sold.

2013-14 - Only 2 trimmings (BT.A and Marstons), RSA sold.

2014-15 - Only 1 trimming (AZN) and two returns of capital from Rexam and Compass.

2015-16 - 5 trimmings (Taylor Wimpey, DS Smith, BT.A, IMB and Compass)

2016-17 - 3 trimmings (Reckitt Benckiser, RIO Tinto and BAE Systems) and two disposals (Rexam and Premier Farnell).

2017-date - 2 trimmings (IMI and Segro) and two returns of capital (National Grid and Compass)

2008-11 was the time of hiatus, with takeovers and disposals galore.

TJH

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Re: In the red with Imperial Brands!

#124526

Postby Arborbridge » March 13th, 2018, 12:14 pm

idpickering wrote:
arborbridge wrote:I dare say Ian would trim my IGG holding at 1.4x median ;) - it has rocketed up in the past few months and might deserve a trim being, let's say, a lesser known HYP share and not one of the stalwarts.


I probably would trim them back Arb. In fact IG Group were another that I couldn't bring myself to add to my HYP. They fall into my 'you don't have to hold everything' pile. As you say, not one of the stalwarts.

Ian.


Not a usual stalwart but the dividend record is good:

20.00 22.50 23.25 28.15 28.15 31.40 32.30

8.3% pa increase for six years, yielding only 3.9% at present suggesting market confidence - I bought when it was higher. The XIRR is one of my best, now 17% Though it suffered volatility recently owing to new regulatory worries, it's recovered and I see it as my representative of the "gambling" sector. The fact that it has now emerged as my biggest holding - knocking on being trimmed - says it all.
Due to its holding size, I might be tempted to put a stop loss on for part of the holding so it will automatically trim if there is a set back. I would be a shame to lose the capital if it turns in to another share starting with "I" - IRV!

Arb.
Last edited by tjh290633 on March 13th, 2018, 5:00 pm, edited 1 time in total.
Reason: Quotes sorted out. TJH

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Re: In the red with Imperial Brands!

#124557

Postby absolutezero » March 13th, 2018, 2:21 pm

tjh290633 wrote:I'm just checking up on the amount of trimming that has been doen since April 2008, when PEP and ISA merged.

2008-9 - This was an unusual year! 17 trimmings and 4 complete disposals (Cadbury, HBOS, Mapeley and Thus).

2009-10 - More like it, 5 trimmings and 5 complete disposals (DSGI, Trinity Mirror, Anglo-American, Rentokil and Premier Foods)

2010-11 - Only 4 trimmings and 7 complete disposals (Prudential, Yule Catto, ITV, Tomkins, Brit Insurance, Northern Foods and Cattles).

2011-12 - Only 3 trimmings (TATE, Shell B and DS Smith), no disposals.

2012-13 - Only 1 trimming (WMH) and WMH rights sold.

2013-14 - Only 2 trimmings (BT.A and Marstons), RSA sold.

2014-15 - Only 1 trimming (AZN) and two returns of capital from Rexam and Compass.

2015-16 - 5 trimmings (Taylor Wimpey, DS Smith, BT.A, IMB and Compass)

2016-17 - 3 trimmings (Reckitt Benckiser, RIO Tinto and BAE Systems) and two disposals (Rexam and Premier Farnell).

2017-date - 2 trimmings (IMI and Segro) and two returns of capital (National Grid and Compass)

2008-11 was the time of hiatus, with takeovers and disposals galore.

TJH

Your style seems a bit like my style as I like to 'tinker'.
What makes you decide to do a 100% disposal as opposed to a trimming?

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Re: In the red with Imperial Brands!

#124585

Postby tjh290633 » March 13th, 2018, 4:59 pm

absolutezero wrote:Your style seems a bit like my style as I like to 'tinker'.
What makes you decide to do a 100% disposal as opposed to a trimming?


Good question.

Cadbury sold to avoid getting Dr Pepper.
HBOS sold when rights issue doomed to fail was announced (switched into Cattles)
Mapeley was going private
Thus was taken over
DSGI stopped paying dividends
Trinity Mirror likewise
Anglo ditto
Rwentokil ditto
Premier Foods ditto
Prudential proposed massive rights issue (Switched into Brit)
Yule Catto had stopped paying dividends, restarted and price rose dramatically, so yield very low.
ITV stopped paying dividends
Tomkins taken over
Brit Insurance going private
Northern Foods taken over
Cattles taken over after long suspension
RSA stopped paying dividends
Rexam taken over
Premier Farnell taken over.

That's about the size of it. Note that I delayed selling many of those which stopped dividends and was able to sell at a higher price than if I had done so immediately.

TJH

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Re: In the red with Imperial Brands!

#124591

Postby BristolDave » March 13th, 2018, 5:26 pm

To bring this back on topic, I really feel the pain of the current investors here although I am now seriously starting to consider a stake in IMB with a view to treating it as a 6% bond (similar to GSK really), I never bought into tobacco previously as always thought it was overpriced for an industry in terminal decline. However the dividend here seems secure and the company seems to have plenty of cash so although we are witnessing capital depreciation at the moment that will halt at some stage soon.

Are there any thoughts on why the price is falling? I cannot find a reason for the fall, there doesn't seem to be any major shorting activity (surprising really) and most recent days there have been more purchases than sells (except today) although I suspect we are now reaching levels where stop losses will be triggered.

If only I can time the purchase somewhere near the bottom ;)

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Re: In the red with Imperial Brands!

#124639

Postby pendas » March 13th, 2018, 8:01 pm

I actually first purchased Imperial in Oct 2013 @ £22.78, selling for £37.90 in March 16.
Repurchased in April 16 @ £38.18 within a ISA and it is from this point that I'm 30% down.
I should have hung on a while before repurchasing rather than restoring the status quo.

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Re: In the red with Imperial Brands!

#124654

Postby MDW1954 » March 13th, 2018, 9:17 pm

pendas wrote:I actually first purchased Imperial in Oct 2013 @ £22.78, selling for £37.90 in March 16.
Repurchased in April 16 @ £38.18 within a ISA and it is from this point that I'm 30% down.
I should have hung on a while before repurchasing rather than restoring the status quo.


So you aren't really 30% down at all. You're up almost 11% on your original October 2013 purchase.

MDW1954

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Re: In the red with Imperial Brands!

#124673

Postby absolutezero » March 13th, 2018, 11:14 pm

tjh290633 wrote:
absolutezero wrote:Your style seems a bit like my style as I like to 'tinker'.
What makes you decide to do a 100% disposal as opposed to a trimming?


Good question.

Cadbury sold to avoid getting Dr Pepper.
HBOS sold when rights issue doomed to fail was announced (switched into Cattles)
Mapeley was going private
Thus was taken over
DSGI stopped paying dividends
Trinity Mirror likewise
Anglo ditto
Rwentokil ditto
Premier Foods ditto
Prudential proposed massive rights issue (Switched into Brit)
Yule Catto had stopped paying dividends, restarted and price rose dramatically, so yield very low.
ITV stopped paying dividends
Tomkins taken over
Brit Insurance going private
Northern Foods taken over
Cattles taken over after long suspension
RSA stopped paying dividends
Rexam taken over
Premier Farnell taken over.

That's about the size of it. Note that I delayed selling many of those which stopped dividends and was able to sell at a higher price than if I had done so immediately.

TJH

So it basically boils down to
- Not wanting to get foreign shares (I have sympathy with that with my TUI dividend cheque saga)
- De-listing or going private somehow
- Suspension of dividends
- Huge rights issues

Kind of bringing it back on topic, how about selling if a stop loss is triggered?

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Re: In the red with Imperial Brands!

#124679

Postby idpickering » March 14th, 2018, 6:04 am

BristolDave wrote:To bring this back on topic, I really feel the pain of the current investors here although I am now seriously starting to consider a stake in IMB with a view to treating it as a 6% bond (similar to GSK really), I never bought into tobacco previously as always thought it was overpriced for an industry in terminal decline. However the dividend here seems secure and the company seems to have plenty of cash so although we are witnessing capital depreciation at the moment that will halt at some stage soon.

Are there any thoughts on why the price is falling? I cannot find a reason for the fall, there doesn't seem to be any major shorting activity (surprising really) and most recent days there have been more purchases than sells (except today) although I suspect we are now reaching levels where stop losses will be triggered.

If only I can time the purchase somewhere near the bottom ;)


Hi BristolDave, despite my numerous mentions of having spent enough on IMB already, I must admit that I am also seriously considering buying more. Yesterday my holdings (IMB) were showing a total 3% loss in capital value terms. When this happens, provided that the share appears sound, I like to average down my purchase price by topping up. I'm not expecting miracles, but I might just follow your lead.

Ian.

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Re: In the red with Imperial Brands!

#124726

Postby absolutezero » March 14th, 2018, 9:43 am

idpickering wrote:
BristolDave wrote:To bring this back on topic, I really feel the pain of the current investors here although I am now seriously starting to consider a stake in IMB with a view to treating it as a 6% bond (similar to GSK really), I never bought into tobacco previously as always thought it was overpriced for an industry in terminal decline. However the dividend here seems secure and the company seems to have plenty of cash so although we are witnessing capital depreciation at the moment that will halt at some stage soon.

Are there any thoughts on why the price is falling? I cannot find a reason for the fall, there doesn't seem to be any major shorting activity (surprising really) and most recent days there have been more purchases than sells (except today) although I suspect we are now reaching levels where stop losses will be triggered.

If only I can time the purchase somewhere near the bottom ;)


Hi BristolDave, despite my numerous mentions of having spent enough on IMB already, I must admit that I am also seriously considering buying more. Yesterday my holdings (IMB) were showing a total 3% loss in capital value terms. When this happens, provided that the share appears sound, I like to average down my purchase price by topping up. I'm not expecting miracles, but I might just follow your lead.

Ian.

I'm in the same boat with Sainsbury.
27% down.
I've said I'll stop loss at 25% but crunching the numbers there doesn't seem anything fundamentally wrong.
A quandary.

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Re: In the red with Imperial Brands!

#124729

Postby tjh290633 » March 14th, 2018, 9:54 am

absolutezero wrote:So it basically boils down to
- Not wanting to get foreign shares (I have sympathy with that with my TUI dividend cheque saga)
- De-listing or going private somehow
- Suspension of dividends
- Huge rights issues

Kind of bringing it back on topic, how about selling if a stop loss is triggered?

I don't believe in stop losses, as everything is relative to the market.

TJH

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Re: In the red with Imperial Brands!

#124733

Postby idpickering » March 14th, 2018, 10:09 am

absolutezero wrote:I'm in the same boat with Sainsbury.
27% down.
I've said I'll stop loss at 25% but crunching the numbers there doesn't seem anything fundamentally wrong.
A quandary.


Likewise absolutezero. I'm only down 12% in capital value terms with my Sainsbury's holdings, with an average purchase price of 273.4p per share. I'm unlikely to top up, but you can never say never.

However, we should all give ourselves a good shake and remember it's about the income. Capital gains/losses are secondary. I'm going off line now, and am going for a walk. Step away from the key boards team!!


Ian.

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Re: In the red with Imperial Brands!

#124737

Postby absolutezero » March 14th, 2018, 10:19 am

tjh290633 wrote:
absolutezero wrote:So it basically boils down to
- Not wanting to get foreign shares (I have sympathy with that with my TUI dividend cheque saga)
- De-listing or going private somehow
- Suspension of dividends
- Huge rights issues

Kind of bringing it back on topic, how about selling if a stop loss is triggered?

I don't believe in stop losses, as everything is relative to the market.

TJH

Quite.
If the market slumped by 20% I'd not be selling everything if most of my shares did similar.

I'm more thinking of company specific stop losses.
I.e. You made the wrong decision. The market disagrees and has marked that company down by 25% since you bought.

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Re: In the red with Imperial Brands!

#124739

Postby absolutezero » March 14th, 2018, 10:21 am

idpickering wrote:
absolutezero wrote:I'm in the same boat with Sainsbury.
27% down.
I've said I'll stop loss at 25% but crunching the numbers there doesn't seem anything fundamentally wrong.
A quandary.


However, we should all give ourselves a good shake and remember it's about the income. Capital gains/losses are secondary.


Ian.

Since learning my lesson with CLLN I can no longer agree with this - and I did for a long time.
I am primarily income focussed but if the market marks your shares down by a large amount then you made a bad decision, surely.
The dividends sweeten the blow somewhat.

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Re: In the red with Imperial Brands!

#124770

Postby kempiejon » March 14th, 2018, 11:56 am

absolutezero wrote:I am primarily income focussed but if the market marks your shares down by a large amount then you made a bad decision, surely.

I have made and will make wrong decisions. I have other shares to mitigate that loss of income. I can sometime salvage some capital but not before the income is gone. If I could always make the right decisions I'd trade much more often but I don't think I'd get it right often enough.
Last edited by kempiejon on March 14th, 2018, 11:57 am, edited 1 time in total.

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Re: In the red with Imperial Brands!

#124772

Postby idpickering » March 14th, 2018, 11:57 am

absolutezero wrote:
idpickering wrote:
absolutezero wrote:I'm in the same boat with Sainsbury.
27% down.
I've said I'll stop loss at 25% but crunching the numbers there doesn't seem anything fundamentally wrong.
A quandary.


However, we should all give ourselves a good shake and remember it's about the income. Capital gains/losses are secondary.


Ian.

Since learning my lesson with CLLN I can no longer agree with this - and I did for a long time.
I am primarily income focussed but if the market marks your shares down by a large amount then you made a bad decision, surely.
The dividends sweeten the blow somewhat.


I hear you on this. No one said investing, of whatever ilk, is easy, and being human, it is hard to try and detract yourself with what’s going on. To clarify my point though, in the main I can stomach the ups and downs of share prices, however, there may be situations when one has to take action. I did so with CLLN, as is known hereabouts.

Ian.


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